Islands housing bill is placed on State House calendar

After winning approval from a pair of committees, bills establishing new taxes on high-dollar Nantucket and Martha’s Vineyard housing transactions, with the revenues shouldering affordable housing efforts, have made it onto the House calendar. In previous sessions, the bills (S 1316 and S 2123) have cleared the Senate after contentious debate but have died in the House, and sponsor Rep. Timothy Madden told the News Service last Wednesday that the bills had been sent to the House first this session to see about support there. The bills apply a two percent land transfer tax to sales of more than $2 million on Nantucket and more than $750,000 on Martha’s Vineyard, and would require ballot approval locally if the bills can make their way through the legislature and earn Gov. Deval Patrick’s signature. Mr. Madden said there’s little in the way of housing available on Nantucket for less than $500,000 or on the Vineyard for less than $350,000, forcing teachers and firefighters, as well as some service economy workers, to commute from the Cape to the Islands.

“It’s a no-brainer,” Mr. Madden said. “It’s the only way the islands I think are going to keep people living in the community on a year-round basis.”

Opponents of the bills in the past have argued against any taxes that increase the cost of housing in Massachusetts. But Mr. Madden said the exemptions built into the bills ensure that the tax only applies to high-dollar sales. He mentioned that one Nantucket property had sold for $19 million and said a two percent tax on the $17 million from that sale that would have been subject to a tax would have produced $340,000 to create affordable housing opportunities or extend rental subsidies.

Sen. Robert O’Leary, who is running for Congress this year, is the chief sponsor of both bills.